Things to take note to prevent E-auction fraud when a consumer participating in an E-auction

Internet auction fraud is a growing epidemic worldwide, as online shopping has grown significantly every year that online shopping has been available. Most internet auction fraud cases involve straightforward scams where consumers allegedly win merchandise by being the highest bidder. All sounds good until they send the payment and never receive the merchandise.

51,000 cases of internet fraud cases were reported in 2002. In 2008, that number ballooned to 105,000. The numbers are staggering, but everyone can lower their risk by knowing what auction fraud is, how to detect it, and how to prevent falling for it.

Tips for preventing E-auction fraud:

1. Understand how the auction works. Many online auctions simply list items that people want to sell. They don’t verify that the merchandise actually exists or that it is described accurately, and they can’t guaranty that the sellers will keep their promises.
2. Be careful if the seller is a private individual. Many consumer protection laws don’t apply to private sales, though government agencies may take action if there are many complaints the same individual or criminal fraud is involved.
3. Be especially cautious when dealing with sellers in other countries. If you have a problem, the physical distance, difference in legal systems, and other factors could make resolving it very difficult.
4. Ask questions about the goods. Try to verify that a seller has the items in front of him consider the payment arrangements requested. Fraudsters will often insist on high-risk payment methods such as cash, cheque, wire transfer or cash transfer systems.
5. Check out escrow services - especially if the other party insists on using a particular service. These sites are often well presented and appear genuine, but fraudulent sites may have a number of spelling and grammar mistakes.
6. Get the name and contact information of the seller. The name, physical street address, email address, and phone number are helpful to have for checking the seller out and following up later if there is a problem. Don’t do business with anyone who refuses to provide that information.
7. Ask about delivery, returns, warranties and service before you pay. Get a definite delivery time and insist that the shipment is insured. Ask about the return policy. If you’re buying electronic goods or appliances, find out if there is a warranty and how to get service.
8. Pay by credit card. Under federal law, you can dispute the charges if you paid the seller with a credit card and the goods were never delivered or if they were misrepresented. If you are paying through an intermediary service, ask what happens in the case of disputes.
9. Protect your privacy. Never provide your Social Security number, driver's license number, credit card number, or bank account information until you have checked out the seller and the online payment or escrow service, if you're using one, to ensure legitimacy.
10. Customer feedback. Examine the feedback on the seller.